The problem is that owners can only cut so much of a facility's emissions by increasing efficiency, so a lot of the reduction could have to come by "going outside the fence," such as by deepening the use of renewable energy, improving grid efficiency and encouraging customers to use less electricity.

Trying to compel operators to rely on such external measures could run afoul of what the government is allowed to do under the Clean Air Act.

The D.C. Court of Appeals upholds EPA regulations requiring power plants to limit emissions hazardous air pollutants, siding with the EPA's determination that its regulations were appropriate and necessary.

The 2-1 court majority rejects arguments the agency should have considered the costs of its regulations before moving forward, while the dissenting judge warns the costs of the EPA regulations would amount to more than $9B/year.

Patriot Coal (PCXCQ) says the U.S. Bankruptcy Court in St. Louis approved its restructuring plan, allowing it to complete a $250M rights offering and close up to $576M in bankruptcy-exit financing in connection with its emergence from Chapter 11, planned for tomorrow.

The plan also contains two settlements with Arch Coal (ACI) and Peabody Energy (BTU), which spun off the mining units that came to comprise Patriot the deals resolve a long-running battle over who is responsible for the liabilities Patriot took on as a result of the spinoffs.

Supreme Court justices today expressed sympathy for the EPA’s approach to air pollution that crosses state lines.

The rule that would curb emissions from coal-fired power plants in 28 states - struck down by the D.C. Circuit Court of Appeals and being tested by power companies, states and miners - has never taken effect, but it would force companies to either shutter old plants or invest billions of dollars in pollution-control technology.

The court’s four Democrat appointees, at times joined by Chief Justice Roberts and Justice Kennedy, suggested the EPA had adhered to the language of the Clean Air Act; only Justice Scalia seemed convinced the rule could be unfair to some states.

Coal (KOL) may become the new tobacco if activist investors have their way; growing numbers of them, concerned about greenhouse gas emissions, are calling to divest holdings in companies that mine and burn coal.

The U.K. today joined a U.S. commitment to minimize funding of foreign coal-fired power stations and says it will seek wider support for the pledge from other nations and development banks.

What galls the activists: Global demand for coal is not in retreat. In 2011, coal was used to generate 30.3% of the world’s primary energy, the highest level since 1969, and the share slipped only to 29.9% last year.

Like tobacco companies, coal producers may move to paying high dividends to attract investors amid an uncertain longer term future for the fuel.

The financing comes on the heels of two other crucial sources of funding for Patriot's reorganization plans: a $250M rights offering, which hedge fund Knighthead Capital has agreed to backstop, and a $310M settlement with Peabody Energy.

Patriot Coal (PCXCQ.OB) is hoping to emerge from bankruptcy protection by the end of the year after Peabody Energy (BTU) said it would provide $310M to finance the benefits of 3,100 retirees that the latter had agreed to continue covering after it spun off Patriot Coal in October 2007. Peabody had wanted to stop making the payments following Patriot's bankruptcy and a new deal it signed with the United Mine Workers of America (UMWA).

Peabody will also extend about $140M to Patriot in the form of letters of credit.

Patriot also reached a settlement with Arch Coal (ACI) in which Arch will provide $5M and the release of a $16M letter of credit posted in its name.

Peabody Energy (BTU-1.1%), which created now-bankrupt Patriot Coal (PCXCQ.OB) through a spinoff, says an offer to settle claims relating to healthcare benefits for ~3,100 Patriot retirees was rejected by the United Mine Workers of America.

BTU says its August offer to settle all claims with the union could have been used to provide the retirees with lifetime healthcare benefits comparable to those of BTU's active corporate employees.

The Environmental Protection Agency is scheduled to today unveil restrictions on carbon emissions for new power plants, a key part of President Obama's policy to fight what many see as global warming.

The EPA will reportedly set CO2 limits at 1,100 pounds per megawatt hour for coal plants and 1,000 pounds for most natural gas plants. To meet those restrictions, coal plants would have to capture and store 20-40% of their CO2 emissions using technology that isn't yet being deployed on a commercial scale. The industry argues that the work would be so expensive that it would preclude the building of new plants.

More far-reaching limits for existing facilities are due to be proposed in June 2014.

Patriot Coal (PCXCQ.OB) and the United Mine Workers say they reached a settlement the union claims eases the severity of wage and benefits cuts a bankruptcy judge had allowed the company to impose.

Patriot says the deal keeps the company on track for reorganization, not liquidation; the union says its 1,800 active or laid-off members in West Virginia and Kentucky can vote on the deal Friday.

|Aug. 12, 2013, 2:12 PM|3 Comments

Jul. 11, 2013, 3:42 AM

A WSJ analysis of 11,000 insider trades at 550 publicly traded companies has found that those trades veer heavily towards the sale of stock in the year before a firm files for bankruptcy protection. At A123 Systems (AONEQ.PK), for example, six employees sold a combined 9.1M shares in the 12 months before the battery maker filed for Chapter 11. Other companies mentioned include Patriot Coal (PCXCQ.OB).